from the who-needs-the-law-when-you-can-bully? dept

Techdirt readers will probably recall a long-running saga involving corporate sovereignty, $500 million, the US pharma company Eli Lilly, and drug patents. In its claim against the Canadian government, made using NAFTA's Chapter 11, Eli Lilly insisted it should have been given some drug patents, despite Canada's courts finding that they had not met the requirements for patentability -- specifically that there was no evidence that the drugs in question provided the benefits in the patent. Eli Lilly said that Canada was being unreasonable in setting a slightly higher bar than other countries by demanding that a patented drug should actually do something useful. As Mike reported back in March, even the lawyers that made up the corporate sovereignty tribunal hearing this case agreed that Canada was within its rights to take this view. They not only dismissed the claim, but ordered Eli Lilly to pay Canada's legal fees.

This reversal in AstraZeneca Canada Inc. v. Apotex, Inc. is particularly disconcerting because Canada had just won an investor-state arbitration award in the long awaited Eli Lilly v. Canada case upholding its more stringent promise/utility doctrine that had been used successfully to overturn two dozen secondary patents, particularly those claiming new uses of known medicines, where patent claimants failed to present evidence in support of the prediction of therapeutic benefit promised in their patent applications.

Thus Canada's Supreme Court has inexplicably thrown away the government's earlier victory, and undermined the country's more rigorous approach to granting pharma patents. Writing for infojustice.org, Brook K. Baker believes this stunning capitulation is a result of unremitting bullying from the US:

Canada had been under intense pressure from the US, which had placed Canada on its Special 301 Watch List for five years threatening that the promise/utility doctrine unreasonably harmed Big Pharma in the US and from the pharmaceutical industry itself which claimed that the doctrine violated global patentability criteria. President Trump's hardball campaign promise to rewrite or leave the North American Free Trade Agreement because of its failure to adequately protect US intellectual property interests may also have played a role. Likewise, President Trump's more recent assertions that US payers are unreasonably subsidizing biomedical research and development because other countries, like Canada, are paying lower prices for innovator medicines than insurers and other payers in the US may also have increased pressure on the Court.

It's really sad to see the Canadian court kowtowing like this, undermining its own independence and moral authority in the process. Weaker patents will lead to the Canadian taxpayer paying higher prices for less-effective drugs. Worst of all, the Big Pharma bullies, aided and abetted by a newly-aggressive US government indifferent to other countries' health problems, will be encouraged to push for even more patent protection all around the world. That will lead not just to higher prices, but to more suffering and avoidable deaths, as crucial medicines become unaffordable for poorer patients.

Reader Comments

Contradiction to concept

If a patent doesn't do what it claims, or can't be proved to be what it is and does not conflate prior art, or is amended minimally to create a supposed new patent, then why is it patent-able?

Unreasonably harmed seems like a capitulation to corpratocracy. Just what is the harm to the end user, and why was that not part of the consideration? ISDS? Screw that, the people are the power, and eventually the government, all three branches will come to that understanding. For a time, and then it will be necessary to remind them again.

These things should be done in such a way that it does not matter which administration is in power...anywhere. So far as the US is concerned, the Constitution says it:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

Re: Supreme Court != Government

I don't see any specific claim from the author that the Supreme Court was lobbied and corrupted, only statements of fact that the USG has intensely pressured the Canadian government over this issue, and now the Court has delivered the desired result, seemingly against the country's best interests. It now needs to be asked why the Court made this decision, and whether there was any connection between the Government and Court, which there obviously should not be.

Just a thought. If Lilly's patented compounds were devoid of utility, why were generic manufacturers in Canada pushing so hard for their invalidation? Does anyone seriously believe that they were committed to the manufacture of drugs having no therapeutic efficacy?

It would also be good to qualify the opinion of Mr Baker by perhaps pointing out that he has been a pretty strong opponent of almost every trade agreement under the sun. The rest of his stories on that site are all pretty monotone. So it's not surprising that he has an opinion about the Canadian Supreme Court being pushed, but with seemingly nothing more to work from than his own feelings and paranoia. If he posted them here, PaulT would rip him a new one.

Re:

This describes ways that a drug company can effectively extend their patents long after they would have run out.

Under the NAFTA-induced Canadian regulations, Health Canada was prevented from issuing an authorization for market entry until all of the relevant patents on a brand name product had been proven to have expired. Including follow-on patents for the same drug, patents over uses, delivery systems and even packaging.

The new patented compounds don't exist to have therapeutic efficacy. They exist as playing cards to extend the patents of those that do.

Re: Couple of things

one-sided

I understand that opinions are generally often one-sided. But I'm sceptical of this whole article because despite many citations it doesn't explain what were the actual reasons presented by the Supreme Court for its decision. It only mocks its decision. Hence I feel the author is pushing his agenda instead of being unbiased.

The article reads strangely. The supreme court doesn't set the law, they interpret it.. The article speaks as if they are making a moral decision about whether patent should or should not be granted in this case. They are not supposed to do that at all. They are tasked with making the decision about whether Canadian law currently says patents should be granted in these cases or not.

Entirely missing from the article is any discussion of what laws the supreme court was interpreting and what their stated reasoning was for their decision. Also entirely missing is any indication of why the decision might be and incorrect interpretation of canadian law.

To blame the supreme court you need at least some speculation as to how the decision is an incorrect interpretation of the law

Re: Supreme Court != Government

the essential claim through the story is that Canada's Supreme Court does not make decisions based on Canadian law

Supreme Courts don't make decisions based purely on law. If the law were obvious one way or the other, the case wouldn't get to them. The justices always issue statements explaining how their decisions are "based on Canadian Law", even when they reach opposite conclusions.

Re: Re: Supreme Court != Government

I think you're conflating the USSC with the SCC -- there is no "the other party".

Here's how appointments work in Canada (courtesy of Wikipedia):

Justices of the Supreme Court of Canada are appointed by the Governor General-in-Council, a process whereby the governor general, the viceregal representative of the Queen of Canada, makes appointments based on the advice of the Queen's Privy Council for Canada. By tradition and convention, only the Cabinet, a standing committee in the larger council, advises the governor general and this advice is usually expressed exclusively through a consultation with the prime minister. Thus, the provinces and parliament have no formal role in such appointments, sometimes a point of contention.

As of August, 2016 Prime Minister Justin Trudeau opened the process of application to change from the above noted appointment process. The new revised process "will permit any Canadian lawyer or judge who fits a specified criteria can apply for a seat on the Supreme Court, through the Office of the Commissioner for Federal Judicial Affairs."[12]

The Supreme Court Act limits eligibility for appointment to persons who have been judges of a superior court, or members of the bar for ten or more years. Members of the bar or superior judiciary of Quebec, by law, must hold three of the nine positions on the Supreme Court of Canada.[13] This is justified on the basis that Quebec uses civil law, rather than common law, as in the rest of the country. The 3 out of 9 proportion persists despite the fact that only 24 percent of Canada's population resides in Quebec. As explained in the Court's reasons in Reference re Supreme Court Act, ss. 5 and 6, sitting judges of the Federal Court and Federal Court of Appeal cannot be appointed to any of Quebec's three seats. By convention, the remaining six positions are divided in the following manner: three from Ontario; two from the western provinces, typically one from British Columbia and one from the prairie provinces, which rotate amongst themselves (although Alberta is known to cause skips in the rotation); and one from the Atlantic provinces, almost always from Nova Scotia or New Brunswick.

A Supreme Court Justice, as with all federal judges, may sit on the bench until the age of 75 years, at which age retirement is mandatory.

In 2006, an interview phase by an ad hoc committee of members of parliament was added. Justice Marshall Rothstein became the first justice to undergo the new process. The prime minister still has the final say on who becomes the candidate that is recommended to the governor general for appointment to the court. The government proposed an interview phase again in 2008, but a general election and minority parliament intervened with delays such that the Prime Minister recommended Justice Cromwell after consulting the Leader of Her Majesty's Official Opposition.

Re:

What this would mean is that due to their evergreening patent, suddenly all the other manufacturers would have to pay Eli Lily a cut, thereby raising the price of the alternative drugs that the government DOES purchase. So if Eli Lily gets the patent, Canada ends up paying them one way or the other, even if the patent is for something useless and the particular drug would never enter the formulary.

Canada in general and their Supreme Court in particular should be ashamed of what they have done here! but like so many other countries, it has allowed the USA to dictate what happens in a country it has no rights over. is it any wonder why the USA is in the top 5 most hated countries in the world? even worse, it is number 1 of the most untrusted nations of the world!!

Re: Re: one-sided

Save the hate for the spineless.

Sounds like a Canada problem, not a US problem. That's a reason to hate on Canada and kick your MP in the balls. It's not a rational reason to hate the US. If you are going to hate the US, at least bother to hate it for what it actually does rather than the spineless crap others do.